NM Variable Rate Mortgage Endorsement Guideline 14

Explanation:

This endorsement insures against invalidity, unenforceability or loss of priority of the lien of the insured mortgage by reason of provisions for changes in the rate of interest. Such mortgages are commonly described as variable rate mortgages. This endorsement does not increase the face amount of the Policy. Each endorsement excludes usury, consumer credit protection or Truth-in-Lending laws.

Rate: See Regulation 13 NMAC 14.10.12.

Underwriting Requirements:

(1) The endorsement may be issued so long as the mortgage or deed of trust or rider refers to the variable rate features of the interest rate or contains a clear representation that it secures interest at a variable rate. It is not sufficient for the mortgage or deed of trust to state that the rate of interest is pursuant to the terms of the note or credit agreement or other security agreement.

(2) The interest rate should be determined by an objective formula not within the control of the lender (e.g., its own "prime rate").

The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.

Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.

This guideline applies to the following form(s):

NM Form 14 Variable Rate, Mortgage Endorsement (ALTA Form 6-06; Rev. 2006)